6 figure incomes and can't afford a load of bread?

[LemonyFresh]

Is it just me or has there been a influx of posts about household incomes of over 100k or similar and complaining or wondering how they're skint at the end of the month and struggling? Is it a stealth boast or do these people actually struggle?

Am I really in the minority with a household income of less than half of this?!

I know we tend to spend to our means but even when DP and I are having a flush month I don't see the point in over spending for the sake of it.

But I agree, struggling is not the right term!

Still, you see what I'm saying - it seems like loads but it can easily disappear.

But that's the case for anyone's money, surely? There's always something else you could be spending it on. I'm sure there are people on £800,000 a year who spend all of that as well - "people don't appreciate how expensive it is to run three yachts!"

I think there's a very human tendency to see whatever our money goes on as necessary, and only stuff we can't afford after that as luxuries.

Yes amber very definitely, I did my own calculation upthread. In all fairness, I should also add that if they're both on 50k, there should be some child benefit too. Though obviously there are more permutations that involve no child benefit than there are that do. If one's on 60k and one's on 40k, with pension and student loan it's just over 5k a month. Easily less than 1k left after housing, childcare, commutes and council tax.

I agree you probably wouldn't be struggling, but I can also see how there wouldn't be a lot left over at the end of the month, and an unexpected expense or two might knock you sideways. And this is predicated on two kids, of course. Three and you might well be fucked. Not unknown for a second pregnancy to turn out to be twins, after all!

Not rtft but once overheard a colleague (on 95k, her h on about 75) moaning they were in debt due to private school fees.

No fucking sympathy. None.

To be clear, none of these figures or outgoings are my own and I am not complaining about finances, before anyone gets annoyed with me!

But that's the case for anyone's money, surely? There's always something else you could be spending it on. I'm sure there are people on £800,000 a year who spend all of that as well - "people don't appreciate how expensive it is to run three yachts!"

Yes, but presumably you understand how that's different to a family like the couples Amber and I theorised about, who would have over 5k a month coming in but spending 4k plus of that on relatively non-negotiable housing, childcare, council tax and commuting? There's a difference between money disappearing on essential running costs and on non-essentials such as private education, yachts and the like.

And that's the point being made: it's possible, because of the deranged property market in London and the cost of childcare, to be in a position where 100k doesn't really leave you any wiggle room. Where you're living on much less than some people with a quarter of your income are. Admittedly I'd still expect to be able to afford bread on that salary though!

Not at all Manumission, it's a very reasonable question to ask.
You are right, there are other factors involved. DC from 1st marriage, eldest nearing end of school, not wanting to upset the status quo at such an important time etc etc
And having had one set of issues with my first DD we had a whole different set of issues with my youngest. It was a tough decision, but we were literally at loggerheads with our local school and the provision they are supposed to provide for sick children, but were totally incapable. When the healthcare people involved in her health care plan tell you that going private is your best option, then it's a sorry state of affairs.
And then we find ourselves in a house that's in its present state, pretty much unsellable, but we can't borrow the money to fix it up, and can't sell up because we simply wouldn't get another mortgage with a negative cash flow, so we're simply paying the interest and haven't paid any capital in a few years. Stuck between a rock and a hard place, and yes, it's laughable when you consider the income. Our house is modest, one of the more modest houses in an expensive commuter belt area, and anywhere round here within a 50mile radius, is similar or more in price. I'm afraid it does keep me awake at night, but yes, we did make that choice..rightly or wrongly

Yes, but presumably you understand how that's different to a family like the couples Amber and I theorised about, who would have over 5k a month coming in but spending 4k plus of that on relatively non-negotiable housing, childcare, council tax and commuting?

I was talking about Amber's example, where the hypothetical family had £2k left per month after essentials. That is a lot. It's absolutely possible to burn through it all and then wonder where your money went (I am naturally shit with money unless I pay close attention to it, so I am sure I could spend all of a £100k/year household income and still feel like I was struggling), but that's the case for anyone, really.

Also, essentials like rent/mortgage, childcare, food, bills are things that families on much lower salaries are paying too. Nobody's imagining that families on £100k/year don't have any obligations on where to spend it - just that what's left after that ends up being a lot more than most people have.

Yes that makes sense mum.

It's so often the way that one or even two complications or hurdles can be worked around but when they start to pile up, it gets difficult.

I hope you find a way out of the deadlock

I think that local norms and expectations play a major role.

I have a much higher income than any of my friends, which means I actually struggle to spend a quarter of it. If my friend and I join a choir that costs £7 per week, or a dance class for £8, because that fits her budget, the fact that I could have spent a much higher amount on an evening out is neither here nor there.

My financial advisor says he sees this a lot among his clients - there's a group of people who prioritise their existing social networks, and so don't actually use their incomes. Others drop their previous friends for new ones, spend at a higher rate, and can find themselves in financial difficulties they never had when they weren't rich.

Thank you Manumission. I hope we all do. Has been an interesting thread.

At least when you earn six figures you usually have some choice about financial planning. I'm of the opinion that if you find yourself in that fortunate position you should aim for a decent surplus to make yourself financially secure ASAP.
For me, excluding housing and childcare costs - £2000 a month I reckon would give me a reasonably comfy if not outrageously extravagant lifestyle for a family of four, running two cars. I wouldn't consider sending my kids to private school even if I could afford to.
Life has enough troubles, if you have the opportunity to remove money worries I would take it.

I was talking about Amber's example, where the hypothetical family had £2k left per month after essentials.

I see. But we'd already established that her 2k estimate was a pretty generous one. There no doubt are people on 100k who have 2k left after the bills mentioned, but they're not going to be the struggling ones unless they have a loooot of debt. Which would be a different conversation.

Also, essentials like rent/mortgage, childcare, food, bills are things that families on much lower salaries are paying too.

They are, but nobody other than high earning households is spending 4k+ on childcare, housing, commuting and council tax combined, simply because nobody else has it. Unless you have significant savings I suppose, but obviously those are harder to build up if you were never high income previously, and would put you in a different boat to most low income people.

Of course you're right that many people on lower income bands have expenses that leave them with little left over after essentials. That's exactly the point that many of us are making. It's about your fixed living costs just as much as what you have coming in. Which is how there are lots of us on this thread who have way less than half of 100k and enjoy a higher standard of living than some of the people who have. That's how you can have 100k coming in and less to spend than people on 20k.

but nobody other than high earning households is spending 4k+ on childcare, housing, commuting and council tax combined, simply because nobody else has it.

Well, yes? They're choosing lifestyles where those are their costs for those things. Not necessarily the wrong thing to do, everyone gets to choose what they spend their money on, etc. But I think there's a pretty significant distinction between "£100k a year doesn't go as far as you think", and "£100k a year doesn't go as far as you'd think if you choose to spend a lot of it."

If my household income went up to £100k a year tomorrow, we would be spending a good chunk more than we are now on rent/mortgage and council tax, because we'd move. But I couldn't reasonably then say "ah, there isn't much left out of that £100k once I've paid for my housing", when that extra on housing is what I've chosen to spend part of that money on.

Ah, choice again. But it's not the determining factor that some seem to think.

If you have jobs that can't be done outside London, or at least where there aren't so many opportunities and it might take a while to line up two jobs in the same region, you don't have much choice but to stay. Or if you have family ties and they're providing you with some assistance, or you they. If you've young children and you were well into your 30s when you had them, you might not have had much choice but to have them then if you were going to at all. If you for whatever reason didn't manage to secure housing in London before the market became deranged, be it age or being priced out before you realised the way the wind was blowing, you can't choose reasonably priced housing in the city.

There is a large gulf of difference between examples like mine, and people choosing to move somewhere more expensive when they know it is expensive, as you say you would do. Or to spend their money on things that actually are choices, like private education.

Well, choice is a bit of a deciding factor. I could not choose to spend £4K/month on those things, or indeed any other things, because we don't have £4K/month to start with.

I appreciate London is crazy expensive, but as PP have pointed out, £100k is well above average household income in London too. There are plenty of people who are living in London with young children on less than that. I don't disagree that it would be much easier and nicer to live in London (or indeed anywhere) on that kind of money, but the fundamental point that it is indeed a lot of money and significantly above what most of us earn still stands.

(Also, to clarify my point about my own housing costs going up if I earned more - we already live in an expensive city. If we earned more, we'd move to a more convenient part of that city where commuting etc would be less of an issue. We wouldn't be upping sticks and relocating to Kensington.)

Mmm, but when previous posters mentioned 100k being well above the average income in London, it was pointed out that that isn't very helpful because so many people in London didn't pay what is current market rent and purchase value for their homes. There are people earning 20k sitting in 500k homes who couldn't even begin to approach buying them now, but because they got theirs in 1998 they have lots more money than people with five times their income who didn't buy until 2015. This is even before considering SH. The housing market in the city has absolutely transformed in the past couple of decades. So the appropriate comparison would be with other Londoners who also have to pay the current elevated housing costs, not with other Londoners full stop. And we know that many such people on lower and even middle incomes are being pushed out of the capital.

The salient point is that if you're in London with a couple of young kids and you didn't get on the ladder/a SH tenancy before things got batshit, actually the choices open to you may not include being able to spend less than 4k on housing, childcare, commuting and CT. You may be living a modest lifestyle with posh holidays, private education etc not coming into it. That's the answer to the question OP posed.

silent Totally agree with you. Childcare in London is killer. £1500 a month is for 8-3 three times a week. That's enough childcare for a very part time job. Most of my friends in office jobs are working 8-6 so need 7-7 care. That costs them more than £2k a month.

actually the choices open to you may not include being able to spend less than 4k on housing, childcare, commuting and CT.

But again, that is only an option if you've got that £4K to spend in the first place. Many - most - don't. And if you don't earn that much, you can't spend it, no matter how necessary it might feel to the people already doing so.

Over a third of children in London are living below the poverty line. I really doubt that £100k/year is below average for a family with young children.

Ye-es. None of what you're saying refutes what I've said, though. Which is, that what you need to spend in order to live is as important as what's going into your bank account. And that therefore simply assuming people who earn 100k must have loads to spare is a flawed approach.

And a big part of the reason over a third of children in London are below the poverty line is housing! This is what happens when huge cohorts of people are shut out of anything other than extortionate housing. The same reason why some people in the top income deciles have much less disposable income than some people in the lowest who have cheap housing. And why households earning more than most of the British population can still be eligible for housing benefit- and need it! That's what our housing policy over the past 20 years has done.

There is, of course, a level of choice, but job opportunities are richer in the capital, especially in, for example, finance or the professional services.

Thinking more about it, a lot of the objections people seem to have to the fact that you can be on 100k in London and not have much to spare seem to centre on the equally undeniable fact that there are people plenty worse off. Which is true. But it's true for the same reasons. A deranged housing market and, as a secondary issue, some of the highest childcare costs in Europe. They're two different symptoms of the same root cause.

So a couple with two kids on 25k in London who are private renting and have high childcare costs may well, even after the substantial state top ups you would receive in that scenario, be in poverty. The couple with 100k who have those same childcare and rental costs will not be in poverty and will be lots better off than 25k London households, but may still easily find they are left with much less than a family on 25k in the north. Or a family with 25k in London who have cheap housing.

Which is, that what you need to spend in order to live is as important as what's going into your bank account.

I think the disagreement here is over the definition of 'need' in that sentence. People usually to arrange their lives to spend up to what they've got available. If you've got £4K/month to spend on housing, childcare and commuting, you'll probably arrange your housing/childcare/etc costs to get as much as you can for your money and spend that whole £4K, and therefore you'll need a budget of £4K to meet your bills going forward. But that doesn't mean that £4K is not way above what most people in the country can afford to spend on those things, or that you 'need' it in the sense that you would not function as a household without it.

So I don't think people earning £100k/year have loads to spare in the sense of swimming around in Scrooge McDuck vaults of unspent wealth. I'm sure they're spending it. But people who are on £100k/year and you' describe yourself as being part of the squeezed middle, or struggling, or whatever, are being (let's tactfully say) somewhat naive about how most of the people around them are living.

(And I totally agree that housing is extortionate to the point of national crisis, especially in London but to a fair degree everywhere else too. It is ridiculous.)

But that doesn't mean that £4K is not way above what most people in the country can afford to spend on those things, or that you 'need' it in the sense that you would not function as a household without it.

Correct on the first, not so on the second. If you disagree, let's hear how my example couple, in Londony jobs, are able to reduce those costs. If you can't tell us, that means you also can't say whether they would be able to function as a household without that spending. It is perfectly feasible that there are people with those expenses who are not able to change them, at least in the short term (childcare obviously not being permanent).

So I don't think people earning £100k/year have loads to spare in the sense of swimming around in Scrooge McDuck vaults of unspent wealth. I'm sure they're spending it. But people who are on £100k/year and you' describe yourself as being part of the squeezed middle, or struggling, or whatever, are being (let's tactfully say) somewhat naive about how most of the people around them are living.

Squeezed middle absolutely, since that's a factual term and if you're on 100k you're not in the middle however squeezed you might be. So anyone saying that on 100k is just plain wrong- you're being kind to call them naive! Struggling no, because it's a fact that you can be struggling on 100k with essential, non-changeable basic living expenses and that is not impacted by whether other people are struggling or not.